Virginia Must Confront a Potentially Catastrophic Transportation Problem, Former Transportation Commissioner Says

January 25, 2010 — If political leaders don't move quickly and set aside partisanship and power struggles, Virginia's highways and related quality of life will face "a catastrophe," a former state transportation commissioner warns in the latest issue of The Virginia News Letter, just published by the University of Virginia's Weldon Cooper Center for Public Service.

Ray D. Pethtel, now director of the Transportation Policy Center at the Virginia Tech Transportation Institute, predicts increasingly severe congestion, deteriorating roadways, risk of bridge failures and possible loss of the state's AAA bond rating if lawmakers don't act soon to end a long-running funding crisis.

Pethtel, who was director of the Joint Legislative Audit Review Commission from 1974 to 1986, served as commonwealth transportation commissioner from 1986 to 1994 under governors Gerald Baliles and Douglas Wilder.

With essentially no money to allocate to the state's urban or rural road systems for the foreseeable future, Virginia's use of bond debt to obtain matching federal funds is "comparable to mortgaging the future," Pethtel warns.

Highway congestion already costs the state severely in several ways, including as a factor in many accidents and fatalities, he writes. With road systems as a key part of state infrastructure, congestion in Virginia's major metropolitan areas is a drag on the economy and quality of life. The Washington, D.C., metro area, of which Northern Virginia is a large part, is frequently cited as one of the nation's most congested metropolitan areas.

Compounding the problem is that highway repair and construction costs keep rising, Pethtel adds.

Democratic and Republican leaders agree there is a need for about $1 billion a year in new money for transportation, Pethtel writes. But they can't agree on whether to raise taxes, create new taxes, take money from the general fund to use for transportation purposes, sell some state facilities and put the profits into transportation, or any other alternatives. They also have not been able to balance urban versus rural needs and financing.

Opposing any new taxes, Republican Gov. Bob McDonnell has proposed a variety of funding recommendations. These include privatization of state Alcoholic Beverage Control stores, with the proceeds assigned to transportation; placing a percentage of sales taxes in Northern Virginia into a regional transportation account; and enacting state border-crossing tolls on interstates 81 and 95.

Most of these proposals would require legislative approval and considerable public debate, and in the case of tolls on federal interstate roads, Congressional authorization, Pethtel points out. Action on them is not likely to happen quickly, he predicts.

For more immediate action to ease the crisis, Pethtel suggests the General Assembly consider four proposals. Two would require no tax vote and all could be set to receive bipartisan support, he believes. The four proposals are:

1. Make the gasoline tax a percentage rate. The General Assembly could consider a conversion of all or a part of the current 17.5 cents-per-gallon tax to a percentage tax rate based on price, as is done in several states. Tax revenue would float with the wholesale price. This action would not produce an immediate revenue increase, but in the future it would help keep pace with fuel price increases and inflation. This would better reflect increases based on global events, including the impact of speculation on oil prices.

2. Extend the sales tax to gasoline purchases and certain other sales. This would raise substantial new revenue for transportation. The sales tax exemption for Internet sales and motor vehicle repair labor costs could be eliminated, with the added revenue used for transportation.

3. Create a statewide transportation district. Virginia law allows the creation of regional transportation districts permitting a local tax. A similar approach could be followed by creating a statewide district. The General Assembly could designate how a governing board representing elected officials from each jurisdiction should be selected, or the political jurisdictions that are members of the district could appoint an elected member to represent that jurisdiction.
Transportation districts have all the powers needed to carry out a complete transportation program, including taxing. To address the constitutional requirement that taxes have to be levied by locally elected persons, any proposal for a tax would have to be approved by a majority of the governing bodies of the member jurisdictions.

4. Create a series of local transportation districts linked together, extending from Northern Virginia. State law allows new districts that are adjacent to the Northern Virginia Transportation District. Such an arrangement would have statewide impact with regional focus. Local taxes would be used for local projects.

To help end the partisan impasse, Pethtel advocates that the Transportation Accountability Commission established by the General Assembly set out a strategic plan to find alternate revenue sources for the future.

— By Robert Brickhouse